MANY Australian companies might moan about the carbon price but there is little sign the tax is prompting extra efforts to cut emissions or disclose more of what they are doing.
Compilers of the annual Carbon Disclosure Project had expected July's start of the carbon tax to spur an increased response from the top 200 companies on the stock exchange. Instead, fewer than half participated, a level little changed from a year earlier.
The response rate to the seventh annual CDP survey was higher among the top 100 stocks, at 71 per cent, though slightly down on the previous two years.
"We'd expect, as the impact of the carbon price and climate change become more material, the response rate will increase over time," said James Day, director of the CDP for Australia and New Zealand.
Financial companies, such as Insurance Australia Group and National Australia Bank, were among those placing the greatest priority on dealing with the challenges of climate change, possibly out of concerns "over reputation and customer expectations".
Among the largest companies declining to respond to the survey were rail freight operator QR National, Westfield Retail, Lend Lease and notably, given its market oversight role the ASX itself.
Bank of Queensland, based in a state that was hit by significant flooding three years in a row, was among seven companies that responded to CDP 2011 but declined to participate this year.
The report's compilers, which include Deloitte Touche Tohmatsu, said the findings suggested companies were becoming "increasingly comfortable" with a price on carbon.
Some 69 per cent of ASX 200 and the top 50 listed companies in New Zealand identified a risk from the carbon price to their business, down from 81 per cent in 2011. Just three respondents David Jones, Origin Energy and Arrium (formerly OneSteel) consider the tax to be a high risk, unchanged from a year earlier.
Airlines Qantas and Virgin Australia were among companies worried that a carbon price might turn consumers off their services. Both, though, won praise for their thorough disclosure.
Just 52 per cent of ASX 200 respondents reported absolute and/or emission-intensity reduction targets, although that was up from 40 per cent two years earlier.
Companies in the highest-emitting sectors were among the least active in disclosing such goals, with just 20 per cent of utilities, a third of material stocks and 40 per cent in the energy sector doing so.
"We would hope to see that companies, particularly those in directly affected sectors, are moving to set real targets," said Shauna Coffey, director of sustainability and climate change at Deloitte.
Taking into account non-respondents, the survey estimates 92 per cent of listed utilities do not have targets to cut greenhouse gases, with energy and material companies only marginally better.
Frequently Asked Questions about this Article…
What did the Carbon Disclosure Project (CDP) survey find about ASX200 companies' responses to the carbon tax?
The CDP's seventh annual survey found fewer than half of the top 200 listed companies participated after the carbon tax started in July. Participation was stronger among the top 100 stocks (about 71%), but overall engagement was little changed from the previous year.
How many ASX200 companies reported emissions reduction targets, and which sectors lag behind?
About 52% of ASX200 respondents reported absolute and/or emissions-intensity reduction targets (up from 40% two years earlier). However, the highest-emitting sectors were least active: only around 20% of utilities, a third of material stocks and roughly 40% of energy companies reported targets. When non-respondents are taken into account, the survey estimates roughly 92% of listed utilities do not have targets.
Which types of companies are prioritising climate-change action most, according to the article?
Financial companies—examples cited include Insurance Australia Group and National Australia Bank—were among those placing the greatest priority on dealing with climate change, possibly because of reputation and customer expectations.
Which large Australian companies declined to participate in the CDP survey?
Some large companies that declined to respond included rail freight operator QR National, Westfield Retail, Lend Lease and, notably, the ASX. Bank of Queensland, which had responded in 2011, was among several that chose not to participate this year.
How do airlines like Qantas and Virgin Australia view the carbon price and their disclosures?
Qantas and Virgin Australia expressed concern that a carbon price might deter customers from using their services, but both airlines were praised in the survey for providing thorough disclosure about their climate-related impacts.
Do Australian companies see the carbon price as a significant business risk?
Per the report, 69% of ASX200 and the top 50 New Zealand companies identified a risk from the carbon price to their business—down from 81% in 2011. Only three respondents (David Jones, Origin Energy and Arrium) considered the tax to be a high risk, the same number as a year earlier.
What conclusion did CDP and Deloitte draw about company attitudes to a price on carbon?
The report compilers, including Deloitte, suggested the findings indicate many companies appear to be becoming 'increasingly comfortable' with a price on carbon, given lower perceived risk and mixed participation in disclosure activities.
What should everyday investors look for in company reporting on emissions and carbon risk?
Investors should be aware the article highlights uneven disclosure across sectors and relatively low participation in the CDP among top companies. Look for clear emissions targets, regular disclosure on emissions and climate risk, and whether companies in high-emitting sectors are setting measurable reduction goals—these signals can help assess climate-related business risks.
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